Toronto, Ontario, Canada

More than 120 leaders from 50 Network member organizations, including 40 chief executives, gathered at the King Edward Hotel in downtown Toronto for the Network's 2009 Spring Members' Meeting. The group also included 30 British, Canadian and Australian colleagues who were part of an International Exchange the day before and whose perspective and expertise enriched the dialogue.

With uncertainty in the financial markets continuing to impact the housing sector and with new leadership in Washington, members were eager to discuss current practices and policy solutions to address their development challenges, to support their neighborhood stabilization efforts, and to encourage and streamline green development and energy saving retrofitting.

In roundtable formats, leaders exchanged ideas on how their organizations are adapting to the changing funding and market landscape, are reducing costs, and are more proactively managing their property operations using interdisciplinary approaches. In addition, members learned about how they might benefit from cost savings through participation in Housing Partnership Direct, the Network's group buying coop, began an exploration of a cooperative approach to employee health insurance, and delved into the comparative and trend analyses available to participants in the Performance Benchmarking Initiative currently in use among 15 organizations.

In the words of one our members, "It is so good to see and be with peers. Peer one-on-one is great. Peer-group thinking and talking is even better. Thank you."

Outlined below are highlights from our two days.

Tax Credits, Capital Markets and Multi-Family Regulatory Reform

Members on a walking tour of the St. Lawrence neighborhood in downtown Toronto.

In a Thursday morning session, members discussed the recent guidance issued to states on the tax credit exchange program (Section 1602) and the HOME gap filler program (TCAP), and built consensus on needed changes. Converting this consensus into immediate action, the Network sent a letter to leaders at the Departments of Treasury and Housing and Urban Development that same afternoon advocating specific reforms that would:

• Permit 1602 funds to flow to project sponsors not just owners;
• Extend the time frame for expending 1602 funds; and
• Allow TCAP to be used in projects that have returned tax credits.

On Friday morning, members affirmed a multi-family reform agenda to support non-profit stewardship by freeing cash flow restrictions and treating non-profits and for-profits equally regarding distributions. A working group of members, in coordination with Stewards for Affordable Housing for the Future (SAHF), will be advocating these changes with the new leadership at HUD over the next couple of months.

At a concurrent Capital Markets session, members engaged in a wide-ranging conversation about the continuing upheaval in the capital markets and the challenges and opportunities it creates for our industry. Several priorities emerged, including:

• Reforming the tax credit program and reinvigorating a national investment market;
• Protecting CRA and using the new federal investments under TARP as leverage toward this; and
• Capitalizing on future financial reform legislation for this sector in a big impact way, as was done previously with the Federal Home Loan Banks' AHP program and the Community Reinvestment Act.

Neighborhood Stabilization

Jacques Sandberg of IFF and Dee Walsh of REACH CDC.

On Thursday morning members discussed strategies for coordinating counseling (foreclosure prevention and pre-purchase) with their REO (Real Estate Owned) efforts, especially those that will be supported by the federal Neighborhood Stabilization Program (NSP). Two Network members, Housing Partnership of Northeast Florida (HPNE) and Indianapolis Neighborhood Housing Partnership (INHP), shared their experience and strategies.

Both HPNE and INHP plan to target NSP funds in a few neighborhoods with high foreclosure rates so that their efforts can have a concentrated impact given the size of the problem relative to available NSP resources. Members further discussed the need to cultivate a pipeline of mortgage ready borrowers for properties coming on line and how pre-purchase counseling was critical to this. Limited funding for counseling remains a major constraint. Several members volunteered to convene via conference call to continue this dialogue and brainstorm strategies for increasing counseling resources in support of stabilization efforts.

Carrying forward to the REO Roundtable Thursday afternoon, members shared their experiences with expanding their REO efforts and plans for using NSP funding. Among the ideas that were discussed:

• Housing Development Fund (HDF) shared their recent success negotiating a buy-back agreement with the City of Bridgeport (CT) when a property is not selling after 90 days to reduce their financial exposure;
• Atlanta Neighborhood Development Partnership (ANDP) described its partnership model using 3rd party contractors so that they can expand and contract quickly to respond to demand. ANDP is also looking at multiple disposition channels for properties, including lease purchase, sale, and rental; and
• Family Housing Fund described the NCST First Look program in Minneapolis in which a consortium of non-profits has negotiated a 7 day window with servicers to make an offer. This has great potential to prevent private investors from stepping in, but the challenge - as elsewhere -- is the lack of capital relative to the scale of problem.

And Friday morning, Craig Nickerson of the National Community Stabilization Trust met with a group of members to review the progress of the Trust and to discuss ideas for how the Trust can be more responsive to the needs and constraints of member organizations acquiring REO properties.

Greening Operations and New Development

Members learning about green programs at the Toronto Community Housing Corporation’s Regent Park development.

Thursday morning, Bill Kelly from SAHF outlined new stimulus resources for making affordable rental housing more energy efficient. While there is funding specific to HUD properties ($250 million), the larger federal investments will be in the existing weatherization program and state block grant funding ($5 and $6 billion respectively). SAHF and several Network members are working with the Department of Energy and states to design pilot programs to facilitate the flow of these resources to nonprofit housing providers. In addition, Bill described his work to create SAHF Energy to manage retrofitting work for their members and the group discussed the possibility of the Network collaborating on this venture.

The dialogue then focused on what members are doing to prepare their organizations for reducing energy costs through retrofitting. REACH CDC of Portland, Oregon shared their approach, which includes capturing and analyzing usage information for properties; partnering with city and county utilities to assist with retrofitting technologies; and training staff and residents. Initially, REACH CDC will concentrate on outlier properties. Several other members also discussed their approaches. California-based LINC Housing has engaged researchers at UCLA to analyze energy costs at their properties and the National Housing Trust is hiring a green project manager.

The experience and insights from Toronto Community Housing Corporation and the British nonprofit Orbit Heart were particularly interesting regarding their innovative efforts to install smart meters and to manage energy usage remotely.

The groups identified opportunities for collaboration including:

• Sharing best practices regarding the steps an organization should take to collect usage data and make retrofitting investments;
• Identifying best products for energy retrofitting - smart meters, heating systems, solar panels, etc - and exploring whether we could purchase them more affordably through Housing Partnership Direct; and
• Working together through the retrofit group of the International Exchange to develop best practices and strategies for reducing energy consumption and carbon dioxide.

Friday morning, Eden Housing in Hayward, CA and the Family Housing Fund in Minneapolis, MN discussed current practices and learning in the Bay Area and Twin Cities respectively with Transit Oriented Development (TOD) projects. Members then strategized on a possible federal agenda to support TOD, in particular ensuring a role for affordable housing in TOD, including:

• Federal funding for land banking and incentives to free federal, state land for TOD;
• Monetary incentives to prioritize mixed income housing with an affordability component as part of TOD projects;
• Bond financing for infrastructure investments, especially to create "connectivity" for commuters (e.g., walking routes, bike paths, and parking);
• Planning grants; and
• Funding to subsidize transportation passes for commuters.

TOD is one element of a metropolitan housing agenda that Network members are exploring together.

Housing Partnership Direct

Casa Loma where members enjoyed an evening reception and dinner following Thursday’s meeting proceedings.

Six members have joined Housing Partnership Direct, our group purchasing cooperative, as of May 2009 (AHC - Arlington, VA;, ACTION-Housing - Pittsburgh, PA; Covenant Community Capital - Houston, TX; HDC of Lancaster - Lancaster, PA; Hispanic Housing Development Corporation - Chicago, IL; and Homes for America - Annapolis, MD).

Hispanic Housing described the ease and success of their first flooring order, purchasing vinyl tile both for projects under development and for a current property. Homes for America just placed their first lighting order, purchasing light fixtures for a new development project. Staff from HP Direct's business partner, CCA Global, was available to answer questions and hear ideas from members.

HPDirect provides members with an opportunity to reduce the costs through discounted prices on certain building materials, and to generate a source of unrestricted revenue by way of dividend income that will accrue to the member once the operating costs of the coop are covered. The goal of HP Direct is to end 2009 with 15 members.

Performance Benchmarking

There are 14 member organizations currently participating in the benchmarking initiative - eight of whom have joined this spring as part of the beta phase and are currently mapping and testing their corporate and property financial data. Staff demonstrated the software, which now offers three dynamic formats:

• A historical financial information report so organizations can trend their corporate or property financials over a period of time;
• A comparative report so organizations can view properties across their own portfolio or as compared to peer organizations - these comparisons can be refined using several non-financial data points, such as financing type, size, and location;
• Bar charts that provide a graphic look at key ratios and benchmarks on comparative property performance.

Two organizations participating in the beta phase, BRIDGE Housing (San Francisco, CA) and National Church Residences (Columbus, OH), answered questions and shared their vision for the project, especially the ability to benchmark properties; to compare operations at the corporate level; and to build a data set to support our policy agenda enterprise-level investment.

Mark Your Calendars - Fall Member Meeting - December 3rd and 4th in San Francisco

The Network's 2009 Fall Membership Meeting will be held at the Omni Hotel in San Francisco on December 3rd and 4th. We look forward to continuing a dialogue on these topics and to seeing you there!